The Fed chief achieved unanimous support on the Federal
Open Market Committee in 2008 when he lowered interest rates to
near zero, and in 2009 when he launched $1.73 trillion in bond
purchases. Last year, his plan to buy another $600 billion in
assets drew one dissent. Yesterday, three policy makers
dissented from the decision to apply a specific date to the
Fed’s low rate pledge for the first time.

Bernanke’s move shows that a Fed chairman can govern with
more than two opposing votes, opening the door to bolder action
if necessary, said Roberto Perli, a former economist in the
Fed’s Division of Monetary Affairs, which helps craft the
language of the FOMC statements.

“We have reached the point where Bernanke is taking
control and saying we have to do the right thing no matter how
many people dissent,” said Perli, a managing director at
International Strategy & Investment Group in Washington. “It
shows the committee can move forward.”

Seven members of the panel favored the action. Richard
Fisher, president of the Federal Reserve Bank of Dallas, Charles
Plosser of Philadelphia and Narayana Kocherlakota of Minneapolis
voted no, preferring to maintain the existing “extended
period” language. The last time three FOMC voters dissented was
on Nov. 17, 1992, under Bernanke’s predecessor, Alan Greenspan.

History of Discomfort

Fed officials have a long history of discomfort with
pledges that limit their policy flexibility, minutes of their
meetings show. The deterioration of the economic outlook, and
the limits of monetary policy when interest rates are already
near zero, prompted Bernanke to opt for the time commitment --
even at the cost of three dissenting votes, said former Fed
Governor Laurence Meyer.

“He must be unhappy about that, but with no regrets,”
said Meyer, now a senior managing director at Macroeconomic
Advisers LLC. “The chairman is the decider, and he will do
whatever he thinks needs to be done.”

Yields on U.S. Treasury 10-year notes fell 0.13 percentage
point to 2.119 percent at 10:14 a.m. in New York. The 10-year
note yields slid yesterday to an all-time low of 2.0346 percent
after the Fed’s statement, before paring its drop. The Standard
& Poor’s 500 Index fell 3.2 percent.

The Federal Open Market Committee lowered its economic
assessment, saying it now “expects a somewhat slower pace of
recovery over the coming quarters.” It left the door open for
more action, saying it discussed “the range of policy tools
available to promote a stronger economic recovery.”

More Action

The dissents may have weighed against stronger action for
now, said Vincent Reinhart, a former director of the Division of
Monetary Affairs. The FOMC majority could push for further
easing at the Fed’s annual conference in Jackson Hole, Wyoming,
later this month, he said.

“The dissents signal a strongly divided committee,” said
Reinhart, a resident scholar at the American Enterprise
Institute in Washington. The Bernanke majority “did less than
they wanted to probably. But they set themselves up for Jackson
Hole to be a midcourse correction.”

In previous eras, dissents could signal rebellions against
the chairman. On February 24, 1986, Paul Volcker was outvoted
when four governors appointed by President Ronald Reagan wanted
to lower the discount rate.

Considered Resigning

Volcker considered resigning immediately, according to the
book “Secrets of the Temple” by William Greider. He remained
chairman until 1987, when Alan Greenspan was appointed.

Meyer, in his 2004 book “A Term at the Fed,” said
Greenspan built consensus before meetings, sometimes lobbying
governors one by one.

There were “two imaginary red chairs around the table --
the ‘dissent chairs.’ The first two FOMC Members who sat in
those chairs were able to dissent. After that, no one else could
follow,” Meyer said in the book. A third dissent would
represent “open revolt” against the chairman, Meyer said.

Greenspan faced three dissents on November 17, 1992. Unlike
yesterday, the opposition was split.

Cleveland Fed President Jerry Jordan dissented in favor of
“immediate action” to increase the availability of reserves.

Fed governor John LaWare and St. Louis Fed President Thomas
Melzer dissented because they believed the economy was
strengthening and central bank policy might “well-establish a
basis for greater inflation later.”

‘Deep Concerns’

Yesterday’s dissents highlight a lack of full support for
Bernanke’s policies at a time when the central bank is under
greater scrutiny. After the Fed announced a $600 billion second
round of bond purchases in November, House Speaker John Boehner
and three other Republicans sent Bernanke a letter expressing
“deep concerns.”

“The reality is at the end of the day Bernanke has an
operational majority and he’s not afraid to ram things through
over the objection of the minority,” said Stephen Stanley,
chief economist at Pierpont Securities LLC in Stamford,
Connecticut. “There’s nobody on the board who’s likely to
dissent, and there’s a handful of presidents who” share
Bernanke’s views on monetary easing.

Prior to yesterday’s meeting, there had been 23 dissents
during Bernanke’s tenure as Fed chairman. Nine of those came
from Kansas City Fed President Thomas Hoenig. He voted eight
straight times in 2010 against record stimulus, tying former
Governor Henry Wallich’s record in 1980 for most dissents in a
single year.

Fisher, Plosser

Fisher and Plosser both dissented in March and April of 2008
in favor of less accommodative monetary policy, with Fisher also
dissenting three other times that year.

The voting membership of the FOMC next year has members less
inclined to open disagreement with the majority, as presidents
from Atlanta, Cleveland, San Francisco and Richmond rotate onto
the committee.

Atlanta’s Dennis Lockhart and Cleveland’s Sandra Pianalto
have never dissented. San Francisco’s John Williams will be new
to the committee, though his predecessor, Janet Yellen, never
dissented. That leaves Richmond’s Jeffrey Lacker as the only
president with a history of dissenting, having objected to five
previous FOMC statements.

The FOMC has had divisive debates over pegging interest
rates to a time period before. In August of 2003, the committee
adopted a phrase from Greenspan’s semi-annual testimony in July
and said “policy accommodation can be maintained for a
considerable period.”

Debate on Language

After a unanimous vote to leave the benchmark lending rate
unchanged at 1 percent, then-Boston Fed President Cathy Minehan
began a debate on the “considerable period” language.

“I’m just wondering whether that’s veering a little too
much toward the commitment side than we need to or ought to do
at this point,” Minehan said.

Presidents Jack Guynn of Atlanta, Hoenig of Kansas City,
William Poole of St. Louis and J. Alfred Broaddus Jr. of
Richmond were among the seven officials who opposed the phrase
among a total of 18 FOMC participants. The majority won after
Greenspan called a vote.

Bernanke, then a Fed governor, argued in favor of retaining
the phrase, saying it would “go some way to bringing policy
expectations in the market toward what I heard around the table
during the entire meeting.”

Reinhart, who was involved in formulating the Fed Board’s
communication strategy, said a policy maker approached him one
day and told him his tombstone would read: “Here Lies Vincent
Reinhart, For a Considerable Period.”